Mexico Emerges as an EV Manufacturing Hub: INA
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Mexico Emerges as an EV Manufacturing Hub: INA

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Rodrigo Andrade By Rodrigo Andrade | Journalist & Industry Analyst - Wed, 03/08/2023 - 12:46

Mexico is quickly turning into an important manufacturing hub for EVs as major automakers, such as Ford, GM, Audi and BMW, keep investing in facilities to assemble electric-powered cars. With Tesla set to join the fray, industry representatives are highlighting Mexico’s benefits for the automotive industry, such as its beneficial location and free trade agreements with North America, says Julio Galván, Manager Economic Studies, National Auto Parts Industry (INA).

The organization reports that Mexico already manufactures EVs from fender to fender with 80% of components made in the country, such as the Ford Mach-E, which has been assembled in the State of Mexico since 2020. Automakers continue to invest in the assembly of EVs, with GM transforming its plant in Ramos Arizpe, Nuevo Leon, for this purpose. Audi also invested to manufacture EVs at its facilities in Puebla, while BMW invested US$866 million in its plant in San Luis Potosi, as reported by MBN. 

Odracir Barquera, CEO, Mexican Automotive Industry Association (AMIA), highlights the importance of public and private collaboration to allow Mexico to retain its position as a manufacturing powerhouse during the revolution the industry is undergoing. “In this sense, the resolution of the USMCA rules of origin dispute panel and the ratification of the global agreement with the EU are very relevant,” says Barquera, according to El Universal.

Barquera highlights the need for a clean and transparent legal framework, especially concerning the use of renewable energies in the USMCA discussions. "We need clear rules for the operation of the three countries and the availability of sufficient energy at competitive prices from renewable sources for large companies," he says.

Tesla Investment is the Cherry on the Cake
While lacking official data from Tesla, Barquera estimates that Gigafactory in Nuevo Leon will represent a US$4.5 billion investment. AMIA forecasts an annual production between 250,000 and 750,000 units at the Gigafactory.

"There was talk of 1 million production units, but with the data we have based on other Tesla’s plants we are forecasting a scenario of 250,000 units, maximum 750,000 units annually,” says Barquera.

Tesla is reportedly requesting the final permits required to begin construction in Nuevo Leon, says Nuevo Leon State Governor Samuel García, according to Reuters. In an interview on Monday, García said that once the final permits are granted, Tesla could start building the plant in March and begin producing as early as next year.

Photo by:   Andreas Volz

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